Even as leading-edge chipmakers lay out millions of dollars for the latest and greatest technologies to squeeze out new levels of technology development, a good portion of the semiconductor industry is focused on a squeeze of a different kind, finding new life in older fabs and equipment to survive in a changing market. Fab 2.0, which took place yesterday at TechSITE South, explored new opportunities for existing fabs, with some speakers describing their efforts to leverage older assets for emerging markets.
Beginning in 2007, Freescale Semiconductor began reinventing its Oak Hill facility in Austin, Texas, turning it from a fab making five to 10 high-volume products and working with about 20 active mask sets to one making a wide range of low-volume products, using more than 250 active mask sets.
Chris Magnella, director of operations, Oak Hill fab, FreescaleIt’s been a tough couple of years making the transition, according to Chris Magnella, director of the fab’s operations, who described some of the technical challenges as it transitions to all the new products it will begin producing in 2011. “It’s really stretching the limits of what we do, though it has nothing to do with printing 22 nm,” he said.
What it does have to do with is getting existing manufacturing systems to support very high-mix, low-volume production without reinvesting significant amounts of resources. And what Freescale could not afford to do, Magnella said, is invest $100 million to build out leading-edge manufacturing capabilities. “We had to look for things that fit our equipment set, and our capabilities,” he said.
Although MEMS looked like a good investment because of the growing market, the concern was that the entire toolset would have to be replaced. “We can’t go out and buy millions of dollars of tools,” Magnella said. “The MEMS business just doesn’t support that.”
Customers that Freescale works with in the nanotube world have requirements that are also pushing the boundaries of the existing tools, Magnella noted. To reinvest, though, would cost upwards of $5 million, and customers just won’t pay for that.
Enter a standard Maytag dishwasher picked up from Home Depot and turned into a MEMS box washer. That’s just one of the effective innovations that Freescale’s engineers developed to address manufacturing needs in the fab. “We’re finding ways to spend significantly less money through innovation,” Magnella said.
In 2007, Freescale was a relatively traditional engineering-maintenance-manufacturing organization. A shift to a Lean Manufacturing culture ultimately was what will likely enable the chipmaker to pull it off by 2011. “The Lean Manufacturing culture was tasked with freeing up and creating engineers. We needed a lot of engineers to pull this off, and we weren’t going to hire a lot of people,” Magnella said. Although Freescale is spending money, he said, it’s primarily on areas where the company can innovate existing tools or find enabling tools.
Work has also included extensive in-house refurbishing of Canon stages. With more than 50 Canon photolithography tools already in the fab, Freescale has been determined to keep them running for several more years. “We’re not going to throw away all those tools,” Magnella said. The technicians are generally able to get the tools back to as-new condition, he added.
Western Digital, which took over from Seagate recently as the world’s largest supplier of hard disk drives (HDDs), has also found itself in a position of prudent investments by relying increasingly on refurbished equipment — not developed in-house, but procured through a growing second-hand market.
HDD volumes are expected to increase ~20% this year, with double-digit year-over-year growth over the next five years, so the industry is facing significant increases in capital equipment spending over the next several years, according to Eric Pokorny, director of procurement and contracts at Western Digital.
To continue areal density growth and maintain a competitive position against flash memory technologies, HDD companies will invest in new technologies and manufacturing processes, Pokorny said. The age of some of the capital equipment in the fab is a major concern, he added, noting that perhaps 75% of the tools in the wafer fab are five to 10 years old, and will have to be phased out in the coming years. Some sputtering machines and other manufacturing equipment are more than 15 years old and are not as efficient as current tools.
Pokorny is asking from the tool suppliers that they continue to invest in technology-enabling equipment, that they be more competitive on initial capital costs, and that they extend the life of their equipment. But Western Digital is also dabbling more in used equipment, seeing significant benefits there.
The market for refurbished, second-hand semiconductor manufacturing equipment has traditionally been difficult to gauge, Pokorny said, noting that it was a semi-secret market that was “unglamorous at best, and unsavory at worst.” But that negative connotation has been going away, he said.
Particularly as a result of the latest economic downturn, there has been a glut of used equipment thrown into the market that is newer than what the company already has in its fabs. Also, more reputable companies are joining the refurbishing game. “Good companies refurbishing makes it more palatable for us,” Pokorny said.
There are several risks related to buying pre-owned equipment, however. When equipment is purchased on the open market, it’s typically sold as is, and where is. The system must be de-installed, crated and shipped, all of which incurs significant costs, and the condition of the tool might not even be known. After receiving a secondary market used tool, the system must be assembled, reinstalled and qualified. It’s not uncommon at this point to find numerous units requiring replacement, Pokorny said, potentially incurring hundreds or thousands of dollars in repair costs. And at that point, the OEM is not too keen to provide the necessary parts.
Despite all of these concerns, however, Western Digital has been very happy overall with its experiences buying used equipment, and will likely continue with this strategy for the foreseeable future, Pokorny said. “Why should we buy new equipment to do processes that used toolsets can do just fine?”
— Aaron Hand, SEMICON West Daily News